Dalmia Bharat shares hit 52-week high; what should investors do?

Shares of cement maker Dalmia Bharat Ltd hit a fresh 52-week high in an otherwise volatile market today. The large cap stock zoomed 2.52% to a high of Rs 2213.4 on BSE. Dalmia Bharat stock opened higher at Rs 2169.65 today against the previous close of Rs 2159.05 on BSE. The stock of the firm has rallied over 289% in the last three years. The cement stock, which closed at Rs 559.95 on June 15, 2020 ended at Rs 2195 on the BSE today. An amount of Rs 1 lakh invested in the shares of Dalmia Bharat three years ago would have turned into Rs 3.92 lakh today. In comparison, Sensex has risen 87 per cent during the period.

In terms of technicals, the relative strength index (RSI) of the Dalmia Bharat stock stands at 63.4, signaling it's neither trading in the overbought nor in the oversold zone. Dalmia Bharat shares have a beta of 1.2, indicating high volatility in a year. Dalmia Bharat shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The stock of the cement firm has risen 70.59% in one year and gained 18% since the beginning of this year. The share has climbed 5.46% in a month. Total 0.76 lakh shares of the firm changed hands amounting to a turnover of Rs 16.63 crore on BSE. Market cap of the firm rose to Rs 41,153 crore on BSE.

23 promoters held 55.86 per cent stake in the firm and 57,049 public shareholders owned 8.17 per cent for the quarter ended March 2023. Of these, 53,041 public shareholders held 1.53 crore shares or 8.17% stake with capital up to Rs 2 lakh. Only 14 shareholders with 2.80% stake held capital above Rs 2 lakh for the quarter ended March 2023.

226 FPIs held 12.45% stake or 2.33 crore shares in Q4 of the last fiscal.

According to Antique Stock Broking, the cement stock can reach a target of Rs 2500 in a year.

“We see multiple triggers for Dalmia Bharat's re-rating: (a) Industry leading growth; (b) Narrowing of profitability gap with larger peers aided by improved cost efficiencies, higher profitability at its North East operations and higher incentives from Murli Industries, (c) Diversification beyond coremarkets of East and South into Central and West regions, and eventuallyinto North as well, (d) Divestment of non-core assets, and (e) Strong balancesheet. We maintain FY24-25E estimates with target price unchanged at INR2,500 based on 12x FY25E EV/EBITDA. Maintain Buy, ” said the brokerage.

Dolat Capital has assigned a target of Rs 2339 in 12 months.

“Dalmia Bharat continues to focus on capacity expansion and strengthen its market position in existing core markets as well as new geographies like Central and North. Powered by an aggressive expansion strategy, it is targeting to become a Pan-India player by FY31. Company’s focus remains on innovation and sustainability and has been investing in cutting-edge technologies, leveraging digitalization, and fostering a culture of continuous improvement. It continues to have a strong focus on the ESG benefits. Company targets to become carbon negative by FY40 coupled with water positive ratio of 20x by FY25 (vs. 14x in FY23),” the brokerage said.

Financial Performance

In the March 2023 quarter, the firm reported a 1% fall in profit at Rs 589 crore against Rs 595 crore profit in the corresponding quarter of previous fiscal. Sales rose 15.74% to Rs 3912 crore in the March 2023 quarter against Rs 3380 crore in the March 2022 quarter.

About the Company

Dalmia Bharat Limited is an India-based cement manufacturing company. The company is principally engaged in the business of manufacturing and selling of cement.

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